denotes premium content | Jan 9 2009 Feature
posted 1 Jan 2000 in Volume 5 Issue 2
Social Fund Funeral Payments
Introduction
The need to provide for a decent burial has played an important part in the history of social policy. In the nineteenth century there was a rapid expansion of friendly and burial societies. By 1874, the Prudential alone had over one million policy holders, and the "man from the Pru" was a familiar visitor in industrial towns up and down the country. The desire to avoid the humiliation of a pauper's funeral spurred people to invest, and it was noted that "hundreds of thousands of families with less than enough to live on contribute substantial proportions of their incomes to industrial assurance". The estimated figure was 3 - 5% of income.
There was always firm opposition to transferring the insurance industry to state management, but over the years evidence emerged of cut throat competition, exploitation and maladministration. The administrative costs of insurance were very high (over 37% of premiums paid), and many policies lapsed, so that families were not covered. The facts and the arguments are, of course, familiar, and in the current debate over the funding of long term care it is salutary to reflect on the reasons why funeral payments were incorporated into the social insurance scheme.
Beveridge recommended the payment of a funeral grant to individuals who incurred expenses in connection with a funeral, and provision was made for this in the National Insurance Act 1946. However there were substantial difficulties in administering a grant which depended on determining "reasonable" expenses and was sometimes competed for by several family members. From 1957, therefore, a death grant became payable into the deceased's estate, to be claimed by his PRs. There were contribution conditions, but they could easily be met. The standard sum payable in July 1948 was £20, which was adequate to meet the cost of a simple funeral. By 1967 it had rised to £30 and remained at that level, its value slowly eroding. By the 1980s it covered about 10% of the cost of a simple funeral, and in 1986 it was abolished. After that, those with insufficient resources were given access to the new Social Fund.
This change was consistent with the policy of government during the 1980s and indeed ever since, to "target" public resources, encourage means testing, and diminish the scope of contributory benefits.
Between 1995 and 1997, the new system was again overhauled. Eligibility was restricted and the regulations became progressively more complex. In a highly critical report (which was ignored by the government), the Social Security Advisory Committee observed that the new system was inequitable and failed to meet the costs even of a simple funeral, whilst the regulations themselves were neither comprehensible, nor workable. Readers may judge for themselves from the following summary of the present law.
Availability
A funeral payment may be claimed where:
The Law
The relevant rules are to be found in regs 7 to 10 of the Social Fund Maternity and Funeral Expenses (General) Regulations 1987 and the Social Security (Claims and Payments) Regulations 1987. A claim for a funeral payment must be made within three months of the funeral
.Qualifying Benefits
The qualifying benefits are:
- income support;
- income based jobseekers allowance;
- family credit;
- disability working allowance;
- housing benefit;
- council tax benefit.
The claimant ("responsible person") or his/her partner, must "have an award" of one of the above benefits at the date of the claim. "Partner" means a spouse, or a person who is living in the same household as the claimant, as her/his spouse.
Example:
Mrs B claims a funeral payment in respect of the funeral of her late husband, who died on 30/6/99. The funeral took place on 6/7/99. The late Mr B was previously claiming income support for himself and his wife. Mrs B's claim is refused because she is not in receipt of a qualifying benefit
- no-one has an award of a qualifying benefit at the date of the claim. (Mr B's claim lapsed on his death);
- if she has not already done so, Mrs B should be advised to claim income support without delay, and then to make a fresh claim for a funeral payment;
- where a claim for income support has been made, but not determined, when the application for the funeral payment is made, reg 6(24) and (25) of the Claims and Payments Regulations allows a further claim to made up to three months after the qualifying benefit is awarded;
- it should not be assumed that Mrs B will receive appropriate advice on claiming;
- appealing against the original adverse decision will be a waste of time, and will involve considerable delay.
Ordinary Residence
The person who has died must have been habitually and normally resident in the UK, apart from occasional or temporary absences (R(M) 1/85). However it is not necessary that s/he was present in the UK at the time of death, so that a claim may be made (for instance) in respect of a UK resident who has died while on holiday abroad.
The Responsible Person
From April 1997, major new restrictions have been placed on eligibility for a funeral payment, by imposing a more stringent test for determining who is the "responsible person". The regulations now require not only that the claimant has a particular connection with the deceased (and is receiving a relevant benefit), but also that there was a good reason for the claimant to assume responsibility for the funeral. The hierarchy of eligibility is set out in regulations 7(1) (e) and 7(3) to 7(7), and may be summarised as follows.
(1) Connection with the deceased:
a) the claimant or her/his partner must have accepted responsibility for the costs of the funeral and
b) the claimant must have been the deceased's partner at the date of death or
c) if the deceased had no partner, the claimant must be "an immediate family member" of the deceased (parent, son or daughter) or
d) failing (b) or (c) the claimant must be a "close relative" of the deceased. (This category includes immediate family members plus in-laws and step-relatives). or
e) failing (b), (c) or (d) the claimant must be a close friend of the deceased.
Where the claimant/responsible person is the partner of the deceased, he or she will be entitled to a funeral payment provided that a qualifying benefit has been awarded and no-one else will be entitled. In all other cases there are a number of further hurdles which have to be surmounted before a claim can be established.
(2) Responsibility
Reg 7(1)(e) requires that the claimant or 'responsible person' should have accepted responsibility for funeral expenses. He or she need not physically have arranged the funeral, and the funeral account may be addressed to someone else, but in such cases it will be necessary for the claimant to establish some kind of agency relationship. Where the claimant is an immediate or close relative, or close friend of the deceased it must be reasonable for him/her to accept responsibility for funeral expenses. Reasonableness is to be determined by reference to the nature, quality and extent of the claimant's contact with the deceased during his or her lifetime, and is subject to para (3) below.
(3) Disqualifying Factors
Given that the claimant is an immediate family member, close relative or close friend of the deceased, in the circumstances listed below s/he will nevertheless be denied a payment because it is considered unreasonable for the taxpayer to bear the cost of the funeral:
Examples:
(i) Mr W has taken responsibility for arranging the funeral of his late brother. Mr W is receiving housing benefit. The two brothers lived together all their lives; neither married.
There are also two sisters, who have had little contact with Mr W, or his brother, over many years. Neither sister receives a qualifying benefit.
Mr W is entitled to a funeral payment because neither of his sisters was closer to, or as close to his late brother as he was.
(ii) The facts are as above, except that the deceased had a son, who is not in receipt of a qualifying benefit. He rarely saw his father, but they were not estranged.
Consequently, Mr W is not entitled to a funeral payment because reg 7(3) deems him not to have had good reason for taking responsibility.
Amount of any Payment (Reg 7A
(i) in the case of a burial:the cremation fee, including medical references;
the cost of any necessary doctors' certificates
(including mileage);
the amount of a doctor's fee for the necessary removal of an active
implantable medical device (e.g. pacemaker) where removed by a doctor, or up
to £20 where removed by a funeral director, or other person employed by him
and
the necessary cost of any documentation required for
the release of funds which result in a deduction from the award;
where the deceased died at home, or away from home,
and it is necessary to transport the body in excess of 50 miles within the UK
to the funeral director's premises, or place of rest, the reasonable cost of
the excess;
the necessary cost of one return journey for the
responsible person to either arrange or attend the funeral and
up to £600 for other funeral expenses (e.g. funeral director's fees,
flowers) (or up to £100 where some of the funeral costs have been met under a
pre-paid funeral plan, see below)
Where an item specified in reg 7A has been provided under a pre-paid funeral plan, no social fund payment can be made to cover that item (see post). However any balance in respect of "necessary" costs may be allowable. If, for instance a funeral plan provides up to £500 towards burial costs, and the necessary costs of purchasing a plot and burial amount to £900, a funeral payment of £400 may be available.
However where a pre-paid funeral plan exists, the maximum available for generic funeral expenses is £100 rather than £600.
Deductions From A Funeral Payment
Regs 8 and 9 provide for a number of items to be deducted from a funeral payment, so reducing the amount available to meet the funeral bill. Most important is the rule that any capital possessed by the claimant in excess of £500 (or £1,000 if the claimant or her/his partner is aged 60 or more) is to be set against the amount of a payment. For this purpose the capital of all family members counts as the claimants', but the disregards on capital to be found in schedule 10 of the Income Support (General) Regulations 1987 will apply.
Apart from that, deductions include lump sums due to the claimant on the death of the deceased under an insurance policy, occupational pension scheme, burial club or the equivalent; contributions made by a charity or a relative of the claimant towards the cost of the funeral; a funeral grant paid in respect of a war disablement pensioner; and any amount paid under a pre-paid funeral plan.
Conclusions
1) The context of this discussion is a situation where the deceased left no assets. This is not unusual. Where assets do emerge, the Secretary of State has a power to recover funeral payments from the estate of a deceased person, in priority to other liabilities.
2) Relatives of a person who has just died do not sit down and discuss who should take responsibility for the funeral. At an emotional and stressful moment decisions have to be made quickly. Often, therefore, the person least able to afford to meet the cost in fact makes the arrangements.
3) The regulations are largely concerned with ensuring that public money is targeted only on need. The reality, however, is that families do not necessarily club together, or look for the best off relative to pay for the funeral. Emotions rule.
4) Where someone on benefits, who has taken responsibility for a funeral is denied a payment there is likely to be real hardship. Even where there is eligibility the capping of payments and the deductions made are draconian. Roughly speaking the average cost of a simple funeral will be about £1300. The funeral director's service charge will account for about £780, and fixed fees (for example for the crematorium, doctor's certificates, the services of a minister, press notices etc), for the rest.
If there is no limousine, no bearers and the body remains at hospital or at home, rather than in a chapel of rest the service charge can be brought down to somewhere near the maximum £600 allowed by the social fund.
5) Funeral directors are heavily relied on by families at a difficult time. In terms of the service they offer, financial matters cannot be ignored, but the complexities of the regulations are such that directors are likely to tread warily in giving advice about funeral payments. It is clear that practice varies in this respect.
6) Decisions by the Benefits Agency on funeral payments can be appealed, and often are. Weeping appellants may be asked to bring forward evidence as to whether or not their siblings were "estranged from" a deceased parent, or whether other relatives were less close to the person who has died than they were. The tensions and the pain of intimate family relationships are laid bare for all to see.
Margaret Richards, Solicitor and Community Care Adviser can be contacted on, Tel: 0113 278 1810
(i) Mr W has taken responsibility for arranging the funeral of his late brother. Mr W is receiving housing benefit. The two brothers lived together all their lives; neither married.
There are also two sisters, who have had little contact with Mr W, or his brother, over many years. Neither sister receives a qualifying benefit.
Mr W is entitled to a funeral payment because neither of his sisters was closer to, or as close to his late brother as he was.
(ii) The facts are as above, except that the deceased had a son, who is not in receipt of a qualifying benefit. He rarely saw his father, but they were not estranged.
Consequently, Mr W is not entitled to a funeral payment because reg 7(3) deems him not to have had good reason for taking responsibility.
Amount of any Payment (Reg 7A
Entitlement is to a payment sufficient to cover the expenses. These fall into two categories: 'necessary costs' which are specified in detail, and other expenses up to a maximum amount;
(i) in the case of a burial:
- the necessary cost of purchasing a new burial plot with an exclusive right of burial;
- the necessary costs of burial.
(ii) in the case of a cremation:
(iii) in either case
Where an item specified in reg 7A has been provided under a pre-paid funeral plan, no social fund payment can be made to cover that item (see post). However any balance in respect of "necessary" costs may be allowable. If, for instance a funeral plan provides up to £500 towards burial costs, and the necessary costs of purchasing a plot and burial amount to £900, a funeral payment of £400 may be available.
However where a pre-paid funeral plan exists, the maximum available for generic funeral expenses is £100 rather than £600.
Deductions From A Funeral Payment
Regs 8 and 9 provide for a number of items to be deducted from a funeral payment, so reducing the amount available to meet the funeral bill. Most important is the rule that any capital possessed by the claimant in excess of £500 (or £1,000 if the claimant or her/his partner is aged 60 or more) is to be set against the amount of a payment. For this purpose the capital of all family members counts as the claimants', but the disregards on capital to be found in schedule 10 of the Income Support (General) Regulations 1987 will apply.
Apart from that, deductions include lump sums due to the claimant on the death of the deceased under an insurance policy, occupational pension scheme, burial club or the equivalent; contributions made by a charity or a relative of the claimant towards the cost of the funeral; a funeral grant paid in respect of a war disablement pensioner; and any amount paid under a pre-paid funeral plan.
Conclusions
1) The context of this discussion is a situation where the deceased left no assets. This is not unusual. Where assets do emerge, the Secretary of State has a power to recover funeral payments from the estate of a deceased person, in priority to other liabilities.
2) Relatives of a person who has just died do not sit down and discuss who should take responsibility for the funeral. At an emotional and stressful moment decisions have to be made quickly. Often, therefore, the person least able to afford to meet the cost in fact makes the arrangements.
3) The regulations are largely concerned with ensuring that public money is targeted only on need. The reality, however, is that families do not necessarily club together, or look for the best off relative to pay for the funeral. Emotions rule.
4) Where someone on benefits, who has taken responsibility for a funeral is denied a payment there is likely to be real hardship. Even where there is eligibility the capping of payments and the deductions made are draconian. Roughly speaking the average cost of a simple funeral will be about £1300. The funeral director's service charge will account for about £780, and fixed fees (for example for the crematorium, doctor's certificates, the services of a minister, press notices etc), for the rest.
If there is no limousine, no bearers and the body remains at hospital or at home, rather than in a chapel of rest the service charge can be brought down to somewhere near the maximum £600 allowed by the social fund.
5) Funeral directors are heavily relied on by families at a difficult time. In terms of the service they offer, financial matters cannot be ignored, but the complexities of the regulations are such that directors are likely to tread warily in giving advice about funeral payments. It is clear that practice varies in this respect.
6) Decisions by the Benefits Agency on funeral payments can be appealed, and often are. Weeping appellants may be asked to bring forward evidence as to whether or not their siblings were "estranged from" a deceased parent, or whether other relatives were less close to the person who has died than they were. The tensions and the pain of intimate family relationships are laid bare for all to see.
Margaret Richards, Solicitor and Community Care Adviser can be contacted on, Tel: 0113 278 1810
